Legal Article - Employment Law

Redundancy and Suitable Alternative Employment

When alternative work is available it must be offered to a redundant employee, otherwise it would be an unfair dismissal. On the other hand if a redundant employee accepts an offer of alternative employment the employer is not liable for a redundancy payment.

Nor is the employer liable if an employee unreasonably refuses an offer of suitable alternative employment, but would have to make a redundancy payment if the offer was of unsuitable employment or the employee’s refusal was reasonable.

If an employer wishes to retain an employee who has been given notice of redundancy, they must make an offer of suitable alternative work before the employment ends. The offer need not be in writing (although preferably it should be) but must specify the main terms of the new job such as remuneration, status and job description.

The new job must start either immediately as the old job comes to an end or after an interval of not more than four weeks. Where the new job is different, or if the terms and conditions are different, the employee is entitled to a trial period of up to four weeks. An employee will lose entitlement to a redundancy payment if they unreasonably refuse the new job offer.

A refusal is likely to be unreasonable if the new job is similar to the old one, the terms and conditions of employment are the same or better, or job prospects and status is enhanced.

On the other hand a refusal will be reasonable if the new job requires different skills, abilities and knowledge, there is a reduction in pay, more travelling time is required, longer or more inconvenient hours are involved or there would be a loss of status and poorer job prospects.

Each case has to be considered on its merits as to what is suitable for one person may not be so for another e.g. extra travelling time may not be a problem for a young single person but may be for a married person with extensive family responsibilities.

The trial period of four weeks can be extended for the purpose of retraining the employee provided the agreement for an extended trial period;

• is in writing and made before the employee starts work under the new contract

• specifies the date of the end of the extended trial period

• specifies the terms and conditions of employment that will apply after the trial period ends.

If during the trial period either party gives notice to terminate the contract, the employee is still entitled to a redundancy payment.